Portfolio

Thursday, February 2, 2017

Earnings - MO, FB, PM, V

We received a slew of earnings reports since yesterday from many of our biggest companies, and I'll update this post to highlight Visa after they report tonight.

Altria(MO) reported Q4 and FYE'16 results yesterday morning. Q4 EPS came in at $0.68 on revenues of $5.45 billion. For 2016 EPS came in at $3.03 on revenues of $22.8 billion. The company recently completed an acquisition of Sherman Group Holdings, which markets ultra premium cigarettes and cigars. The company gave 2017 EPS guidance that ranges between $3.26-$3.32. The stock initially started the day down a bit, but moved up the rest of the day to finish up 20 cents higher than the day before. #winning. Here are the CEO's remarks:

"Altria had another outstanding year," said Marty Barrington, Altria's Chairman, Chief Executive Officer and President. "We grew our earnings in line with our long-term objectives while returning a large amount of cash to shareholders, improving our balance sheet and strengthening our organizational capability, thus positioning Altria to continue to deliver on our long-term financial goals. In 2016, Altria's total return to shareholders of 20.5% outpaced both the S&P 500 and the S&P Food, Beverage and Tobacco Index, marking the fourth consecutive year that total shareholder return exceeded 20%."

"During the year, we also rewarded our shareholders by paying out over $4.5 billion in dividends, raising our dividend by 8%, and repurchasing over $1 billion of our shares under an expanded $3 billion share repurchase program. And with Altria's support of Anheuser-Busch InBev's landmark business combination with SABMiller, we enhanced the value of our beer investment and our position in the global brewing profit pool."

Phillip Morris(PM) - reported it's Q4 and FYE'16 results this morning. Q4 EPS came in at $1.10(up 37.5% YoY), on revenues of $19.2 billion. FYE 2016 EPS came in at $4.48(up 1.6%) on revenues of $75 billion. The company increased it's HeatSticks shipment volume to 7.4 billion units from 396 million units in 2015. The company gave 2017 EPS guidance that ranges between $4.70-$4.85 which is an increase of 9-12%. The stock is up over 1.7% so far this morning. Here is the CEO's remarks:"Our results last year underscore the strength of our existing business, driven by our world-classbrand portfolio, the normous promise of our Reduced_risk Products and the tremendous commitment of our talented employees," said Andre Calantzopoulos, Chief Executive Officer. "We continue to make considerable progress on the development, assesment and commercialization of our Reduced-Risk Products. Our ambitious goal, to transofrm PMI from a manfucturer of combustible tobacco products to an RRP-focused company, took a further important step forward at the end of 2016 with the submission of our Modified Risk Tobacco Product Application for our heat-not-burn IQOS product to the U.S. Food and Drug Administration.""We have entered 2017 confident that our base business fundamentals are in robust shape, and increasingly excited by the tremendous potential of our RRP portfolio to materially acccelerate our overall business and contriute significantly to our commitment to generously reward our shareholders in the years to come."Facebook(FB) reported it's Q4 and FYE'16 results yesterday. Q4 EPS came in at $1.21(up 124%) on revenues of $8.8 billion. FYE 2016 EPS came in at $3.49 on revneues of $27.6 billion(up 54%). The company saw DAU's climb to 1.23 billion up 18% YoY. The company is continuing to see impressive growth although Mark Zuckerberg re-iterated ad-revenue growth will come down meaningfully in 2017, and the company sees aggressive investment in a lot of areas. The company doesn't provide revenue and EPS guidance but does give other metrics. Here are some key ones for 2017:

34% increase in headcount

40-50% increase in total GAAP expenses with growth rate expected to increase over the year

$3.9-$4.1 billion in share based compensation

$7-$7.5 billion in capital expenditures.

Visa(V) reported Q1'17 results with EPS of $0.86 on revenues of $4.5 billion(up 25%). A lot of the results are skewed by the Visa Europe integration, but overall from my perusal the company is still showing good gains in payment volume growth after taking the strong USD into consideration. The stock is up 3% in AH trading so participants are on board so far, although we saw the same reaction to FB yesterday. Here is the CEO's remarks:

“Visa’s fiscal 2017 is off to a terrific start with a strong first quarter of revenue and earnings growth driven by accelerating growth in payments volume, cross-border commerce and processed transactions in virtually all regions around the world,” said Alfred F. Kelly, Jr., Chief Executive Officer of Visa Inc. “As we look ahead, we continue to see good momentum in the business driven by domestic and cross-border volumes, increasing consumer participation in electronic payments in developing markets, and the further acceleration of e-commerce in developed markets,” added Kelly. “We remain focused on the integration of Europe which is proceeding well.”

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